After a Dramatic Summer Pullback, American Builds Up in New York This Fall

There has been a great deal of discussion around American and its shrinking presence in New York. While some have chastised the airline for pulling back significantly over the years, I am not one of those people. Why fight a battle you have no chance of winning? Some saw this summer’s hefty pulldown at JFK a sign of further shrinking, but it’s not. A schedule change over the weekend shows that starting in November, American is ramping back up even beyond where it was before.

American can run 111 daily flights from JFK with the slots it has, but right now it’s only flying about 93. And that’s about to dip even further with cuts this summer in Raleigh/Durham, Boston, Cleveland, and Philadelphia. Why? There’s a publicly-stated reason, but I’m fairly certain there’s another underlying one as well.

The official reason is that there’s a runway re-build planned for this summer and it’s going to make for a really ugly operation. Last year the Port Authority approved a $355 million rehab of runway 13L/31R. The asphalt will be replaced with longer-lasting concrete, and there will be new high-speed taxiways to improve flow at the airport. But between now and November, it’s going to be a mess. So American asked for a waiver to temporarily park 27 slot pairs this summer to help relieve the congestion. The waiver was granted, and so the schedule has been pulled down.

This may sound strange to you. Why would American want to use fewer slots during the peak summer season? Well, that brings me to my second point. Anyone want to guess when the 737 MAX will fly again? Me neither. Using this slot waiver gives American a chance to reallocate those airplanes elsewhere to cover for the MAX grounding. American isn’t going to pull down rock-star hubs at Dallas/Fort Worth and Charlotte, so it’ll look toward where the under-performers are. This lets them free up capacity and keep the slots at JFK. Win-win for American… (if keeping slots at JFK counts as a “win.”)

But if you thought that this pulldown was going to be permanent, it’s not. Starting on November 21 when the construction is done, American is ramping up above where it was before.

Daily Flights From JFK To:

Before the Waiver

During Waiver

Starting Nov 21

Miami

6

6

7

Phoenix

4

5

6

Chicago/O’Hare

1

2

4

Raleigh/Durham

4

2

5

Boston

4

1

6

Cleveland

3

1

2

Columbus

1

1

2

Pittsburgh

0

1

4

Baltimore

1

1

5

Philadelphia

1

1

5

What does this tell us? Well, it says a couple of things. You’ll notice that a lot of the build-up is in hub markets. Those are about providing connectivity throughout the network. Further, unaffected by this pulldown and ramp up are American’s flights to primary business centers like LA, London, and Sao Paulo. American will continue to serve those routes since it’s important from a network perspective.

But the rest of the service is in smaller spokes where American has a decent local presence. And that confirms to me what I’ve always thought was American’s plan post-merger. These schedules are about New York as a destination, not as an origin.

Take Pittsburgh for example. American has a legacy in Pittsburgh (via US Airways) and has substantial service to all its hubs (except LA) and a couple other places (like Raleigh/Durham). Do New Yorkers care about having 4 flights a day from JFK to Pittsburgh? No. They can get to Pittsburgh on Delta or United, airlines with a much bigger presence in New York which are likely to garner more loyalty. But for those in Pittsburgh, having the 7 daily flights into LaGuardia and the 4 into JFK provides huge utility and likely helps American to get a stronger share of wallet from people in that city.

Or look at Cleveland. There is an easy day trip to be done with American’s schedule from Cleveland. But for New Yorkers? The first trip to Cleveland doesn’t go until mid-afternoon. I used to assume this was more about positioning for Transatlantic service, but there isn’t much of that left to speak of. It’s about serving Clevelanders.

Or look at Baltimore. Ok, nevermind. That one looks like purely like slot-squatting. But you get the point overall.

Is this the right way to serve New York? For American, it is. Past decisions about swapping slots can’t be revisited. American is destined to be a lowly-third tier carrier in New York. So it can just use those slots to help boost competitive advantage elsewhere. And when convenient, like this summer, it can apparently just not fly them.

As an industry observer, I just wish American would take a similar stance in LA. (As a local resident, however, I gladly welcome the plethora of low fares.)

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44 Responses to After a Dramatic Summer Pullback, American Builds Up in New York This Fall

Slot hoarding by scheduling flights between a city pair that is so close together that it can easily be driven (or in this case, done on Amtrak) and at an absurd frequency. L-US was notorious for slot squatting at DCA running something like 15 RT between DCA and PHL.

It is noteworthy that American is the only airline at JFK that stepped forward to reduce flights. Delta and JetBlue are actually increasing flights during the summer; the total number of flights by US airlines is down but there will be a further shift in share from American to Delta and JetBlue.

The runway construction doesn’t and won’t change the fact that American is the only US airline that has shrunk in NYC since the USAirways merger 5 years ago.

As a hub yes, I agree. As a strong oneworld focus city I beg to differ. With PHL, AA can adjust JFK to serve their long term needs, it is no longer a “cornerstone” airport with the “new” AA, but it isn’t jettisoned, either.

exactly which part, other than GRU HKG LHR, is oneworld so “exceptionally strong” internationally *nonstop* out of NYC compared to Skyteam or Star offerings ? (the through-service offering by QF isn’t all that different in reality when compared to any logical 1-stop alternative. by “Exceptionally” i meant a slight lead in market shares to something like BCN isn’t sufficient to make up for multiple glaring holes in the totality of oneworld’s networks combined.

You can add up every single oneworld airline, including all those with either no JV with AA or outright hostile, just counting *relatively* business heavier INTL destinations alone, oneworld doesn’t offer NYC nonstops from Shanghai+Beijing, Singapore, Mumbai+Delhi, Mexico City, Frankfurt, Zurich, Tel Aviv etc.

(i’m already being generous here by not counting the more secondary ones like AMS MUC ICN IST JNB. We can be super generous and “pre-allocate” CZ hypothetically into oneworld, and doesn’t change anything for airports I’ve mentioned above)

the “international traffic” argument for 5x daily PIT is a herring redder than anything you can find at a Scandinavian Smörgåsbord

AA’s JFK *widebody* INTL departures (by and large, LHR, deep LatAm, and some random Europe thrown in for good measure) are all extremely bunched up in the late afternoon early evening time slots.

So there’s little utility in offering extra frequencies that will only subject the flyer to ungodly-long layovers, especially if said pax isn’t heading to a JFK-unique destination, in which case, most likely the aa.com engine will show more desirable layover duration offerings via PHL CLT MIA etc.

Is there really a need for American to have so many BOS-JFK flights, other than squatting on the slots? Sure, some of those flights may help feed some traffic for international flights, or for flights from JFK to other US hubs, but still…

From an O&D side, Boston to New York is a ~4 hour train ride, and that’s downtown to downtown. I know Amtrak is not known for the best schedule adherence, but I doubt taking the plane can beat that door-to-door time by much.

I don’t know how big the market is, but it’s definitely non-zero. DL’s shuttle service flies it 16x/day from LGA. JFK-BOS is a convenient option for business travelers from Long Island, who would somehow have to get themselves into Manhattan first, before catching a train…which is probably enough to make flying attractive, since one can drive oneself somewhat easily to JFK vs. a train trip to Penn Station followed by another train. Unlike the LGA shuttles, the JFK-BOS flights are usually fairly cost competitive with the Acela service as well.

JFK-BOS isn’t going to attract many who don’t have ties to Long Island, IMO.

Makes more sense when it comes to people going to/from the burbs instead of downtown.

My favorite short flight between two decent sized cities is ORD-MKE. That route is one that definitely only exists for those connecting at ORD. At 58 nm, when I flew that route a few years back (connecting in ORD from a different originating airport) on AA or UA, the captain described it as the shortest mainline route in the airline’s network.

talk about grading on a curve. so the forced build up due to “use it or lose it” at point of waiver expiration is now billed as “building up in new york” …. especially when most of the “increase” are on 50-seater ERJs (or whatever that 44-seat variant AA has, while DL and UA have more 2-class E-jets, and once in a blue-moon, a mainline)…

not like that frequency to PIT is all that either considering DL is 10x PIT-NYC and UA is 9x PIT-NYC.

some are painfully obvious slot squatting efforts like 5x daily JFK-PHL ?! Anyone who ain’t drinking that Fort Worth kool-aid ain’t gonna believe 5x JFK-PHL on ERJs is the best use case of slots that DL and B6 has absolutely no issue filling with large mainline planes, and in DL’s case, frequently with wide-bodies. But then again, L-US is the master of slot squatting considering the days that did double-digit daily frequencies on LGA-PHL, a flight so short even Amtrak *Regional* takes 1hr30 while Acela is 1hr15.

yea apparently *not* pulling down flying to your fortress hubs (and in CLT’s case, largely devoid of meaningful LCC competition from any airport within reasonable proximity) now deserve a gold star for participation.

And btw, next time whenever someone wanna hype about how strong AA’s 3-class transcons are, remind them only JFK-LAX is strong. Their JFK-SFO offering is so weak compared to DL UA B6 it’s not even funny at this point.

It would be great if you could dive into Southwest’s New York City strategy, which is very similar to what American is doing here. It’s not about serving people who live in New York — it’s about serving people who come to New York.

“nicely profitable” when net margin ex-specials is largely fluctuating in the single digit space, give or take, for the carrier the freshest out of BK court (read: dumping liabilities) is the perfect definition for “grading on a curve”

heck, at this point, even UA, the US3 with the fewest fortresses to abuse, has a better chance closing the margin gap with DL

Airlines that have tried to be everything to everyone are gone. The airline industry is mature. It’s no longer a growth industry. Therefore carriers have to pick and choose their battles. Instead of going head-to-head on every route, carriers are finding their own niches and business models. American is a very weak #3 at JFK. That’s why it’s serving the airport from places where it’s strong. American has a strong connecting hub in Philadelphia. It doesn’t need New York for that purpose. I don’t see Southwest make a big push to grow in New York. I’m also not seeing airline pundits criticize it for not doing so. Both Southwest and American know what they are in New York and are acting accordingly.

LAX is a slightly different animal. While LAX is highly fragmented, unlike JFK, there is no “weak sister” there. The four major airlines have a more balanced presence at LAX. Moreover, American is a slight number one at LAX, not a weak number three as at JFK. American has no “Philadelphia” on the West Coast. It’s stuck with LAX (which probably isn’t the worst place to be stuck with). United has San Francisco. Delta has Seattle. Southwest is strong in the entire state of California. If American feels it needs to have a presence in Asia (which it obviously does), it probably feels it should have a West Coast gateway. As with New York, it seems to me that each airline is carving out its own market niche instead of trying to be everything to everyone.

I know exactly where Phoenix and Arizona are. I guess I should have not been so literal. It is clearly western. If a airline based in California establishes a hub in Pittsburgh or Cleveland, it is seen as branching out to the east. My point was to show that AMR has a western hub.

Phoenix is about as “west coast” as Salt Lake City (in fact Phoenix is almost directly south). Delta has a large operation at LAX and SLC. Why can Delta have both an intermountain and west coast hub but not American? By the way, Salt Lake City’s metro area has about 1.2 million residents. The Phoenix metro area has about 4.7 million people (almost 4x as many).

It’s more difficult to consider PHX as an intermountain hub like you do with SLC or DEN due to the fact PHX is so far south it makes it more difficult to serve Wyoming, Montana, Idaho, and the Dakotas.

But, PHX is the largest CSA at 4.7 million vs. 3.5 for Denver and 2.6 for SLC.

Strangely enough SLC actually has more European destinations than PHX.

Looking at maps in and of themselves are sometimes misleading. The Phoenix metropolitan area has about the same population as the states of Noth Dakota, South Dakota, Wyoming, Montana and Idaho COMBINED. Amplifying part of your comment, the state of Arizona has over 7 million residents. Moreover, the population in the southern tier of states is quite a bit greater than the northern tier. More people = more traffic. So Phoenix is very well positioned to carry traffic through the most highly populated part of the west.

PHX isn’t a good gateway to Asia. A huge chunk of US-Asia traffic is going to California, and those passengers don’t want to backtrack, especially when they have so many nonstop options on various Asian carriers.

AA presents an interesting paradox in rankings in NYC – they’re #2 at LGA, #3 at EWR, and #3 at JFK, but combined NYC they’re #4.

Saying “they’re carving out a niche business and picking battles” for NYC is just like a hypothetical Brazillian airline saying “who cares about Sao Paulo when we have a fortress hub at Belo Horizonte”

Interestingly, WN is restarting BWI – EWR. United stopped that route a few months ago. So that will mean even larger planes flying a route that is only about 200 miles in length. They obviously see some value there.

A response to several comments made here.
Domestically, AA is the largest airline in either passenger or revenue share from JFK only to CLT, DFW, and MIA. They are no longer the #1 airline to any destination in the west or to any of the cities that have regional jet service, including PIT and are actually #3 or 4 in market share and revenue from the combined NYC market.

Delta is the largest airline in terms of local market share and revenue from JFK to LAX as well as the west coast as a whole and from the three combined NYC airports to LAX while DL has the largest share from JFK to SFO but UA is larger from all 3 airports to SFO. UA has a larger share to the west coast. American is #4 from NYC to the west coast, bypassed in both revenue and market share by B6.

AA’s continual cutting of international routes from JFK reflects that they are #3 of the 3 US airlines to most of the continental Europe destinations they serve from JFK. American, Delta and United are all very similarly sized even to Madrid and Barcelona which shows that American’s JV partnership with Iberia really doesn’t give it an advantage in the local New York to Spain market.

Reducing connecting domestic flights to international flights at JFK comes at a particularly bad time since AA is moving the 767 out of JFK and replacing it with the 777. Not only is the 777 much larger and more costly per seat to operate but the lack of feed will force AA to further discount its NYC local fares where it already doesn’t get fares as high as Delta and United.

The regional carrier operation does provide feed to non-affiliated international carriers and can be done at decent fares for AA. The problem is that there is little strategic reason to provide feed to other carriers and the cost of that feed is expensive for AA compared to DL and B6 which use more cost-efficient aircraft.

Finally, the notion that Philadelphia is a good place for American to shift resources is risky given that the Boston and Philadelphia to Europe international markets are similar in size. DL’s buildup of international flights at BOS in addition to its hub at JFK alongside UA’s hubs at EWR and IAD means that AA is slipping not just in the JFK to Europe but in the entire NE where DL and UA have surrounded AA with bigger and faster growing operations. B6′ soon to be announced expansion of NE to Europe service will only put more pressure on AA.

American is now the #3 airline to/from the west coast as a whole in terms of revenue and ASMs. Of course WN carries far more passengers but their total revenue trails UA and then DL. Just as in the NE, AA doesn’t have the mass in multiple cities compared to DL and UA that is necessary to successfully compete in rich, densely populated regions.

UA is just so much larger from EWR to SFO – which is not surprising – that it offsets its weakness by not flying from JFK.

And, it also should be clear that Delta has become the dominant legacy from NY state while UA does it from EWR. Other than to E. Asia and some additional Latin America, Delta and United offer fairly comparable networks from NYC – which also means that American is competing for relevance not just against two well-developed legacies but also JBLU.

And I do think you will see DL re-enter the JFK to E. Asia market with Tokyo and Beijing at least.

Highly unlikely DL will fly JFK to PEK. They have limited feed on the PEK end and the market from NYC is sufficiently served. If they can get their hands on HND slots, then yes, maybe a JFK-HND route, but Japan is not the focus of DL’s growth in Asia anymore and has not been for a while. ICN and PVG are their Asia connecting points.

With the opening of the new Daxing airport, China Eastern will have a dual hub structure at PVG and Daxing. There is expected to be a significant increase in new capacity and route authority with the opening of Daxing. Delta and China Eastern will likely add a number of new US to Beijing flights via Daxing.
American is holding off on releasing its ORD-PEK and PVG flights because they want to connect with China Southern at Daxing as well. It is not certain how big China Southern will be at Daxing but they will undoubtedly be larger than they are at PEK.

“UA can’t be the largest to SFO from all 3 major NY Airports because it doesn’t fly to SFO from any nonstop by EWR”

okay i have absolutely no idea where that came from cuz UA flies roughly 14-17x daily *nonstops* between EWR-SFO, and maybe like 10-12x EWR-LAX (forgot the latest schedule now). There’s also 3x daily EWR-SNA nonstop, so on any average weekday it’s roughly 13-15x daily nonstops to LA Basin, about 14-17x to Bay Area (IIRC EWR-SJC didn’t last long).